Dave Ramsey on small business: Managing a cottage industry
I work full-time as a guidance counselor at a high school, but I bake and decorate cakes on the side. Word about my cakes has gotten around, and the demand has really grown. Now I'm being asked to do weddings and lots of other big events. I want to keep my business small, and I'm not sure how to handle things now.
It's great that demand has risen, but I can understand how that could also be a burden in your situation. Trying to keep a side business from blossoming into a full-time job can be a good problem to have though. It means people really like what you're doing.
I'd suggest two things if you're absolutely sure you want to keep this business small and maintain it as a cottage industry. First, you need to raise your prices. Some people will decide not to be customers any longer, but that's okay. You might not have quite as many clients, but you'll make more per cake.
The second thing is to be selective about the people with whom you choose to work. Even if things have picked up lately, you're still not doing a big enough volume to put up with a lot of attitude from spoiled customers. If a Bridezilla walks through the door, you can simply choose not to work with her.
That's my advice, Jamie. Select your clients carefully and raise your prices. I think you'll get more enjoyment-and more money-out of your business that way!
Building a mission statement
How do you build a personal and company mission statement?
This is a great question. First, I think you understand the importance of what you're doing. Coming up with a meaningful mission statement, one that is impactful both for you and your clients, will take some time. It's not a one- or two-hour meeting kind of thing. It is one of the most important things you'll ever do as a business owner, because it will impact you, your team and how you do business.
That's not to say that mission statement can't evolve over time. As your company changes and grows, and as the marketplace moves, it's perfectly okay, and sometimes necessary, to carefully and thoughtfully re-write your mission statement. If this happens, just make sure you take the same care and time used when you crafted your original one.
More than anything else, I think your mission statement should reflect your calling. I also believe it needs to include the following information:
Your or your company's skills and abilities. If you've been in manufacturing for 20 years, you probably shouldn't have a mission statement that talks a lot about software development or marketing. That's not your area of expertise. What is the thing you can do, want to do, and will do?
Your or your company's personality traits. How do you and your team execute projects? This is your personality. Are you task- and project-oriented, or are you more compassionate and people-oriented? Maybe you're detail-oriented. I'm not sure I'd want an engineering firm to design interstate overpasses if they're more about compassion and people than details. In that kind of work, the details matter more.
Your or your company's values, dreams and passions. This is why you're doing what you do. For a company mission statement, this is where you really breathe life into the lungs of your organization.
I think this is where you go for your first mission statement, Scott.
Dave Ramsey is America's trusted voice on money and business. He's authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.